MILLENNIUM & Copthorne is to sell its prestigious Plaza hotel in New York for about £370m.

The hotels group said the joint venture which runs the Plaza, Plaza Operating Partners - in which the group has a 50% stake - had agreed to sell the hotel to CPS One, an affiliate of US property investment group El Ad Properties.

It said it expected to complete the deal with CPS later this year.

Hotel reservation agents have described the Plaza as "the crown jewel of Manhattan's fabled Fifth Avenue".

The hotel was used as a setting for the hit film Home Alone and provided the venue for the wedding of Hollywood stars Michael Douglas and Catherine Zeta-Jones in November 2000.

In the year to December 31, Millennium & Copthorne's share of turnover from the Plaza totalled £35.9m, while its share of the hotel's pre-tax losses was £600,000.

Millennium said it would use its share of the sale proceeds to reduce its debt and to fund the group's general working capital.

Chairman Kwek Leng-beng said the sale was a result of a review of the group's worldwide hotel portfolio by newly appointed joint interim chief executives Tony Potter and Wong Hong-ren.

They have been assessing the potential of the group's properties with a view to improving revenues and profits.

"We believe the decision to sell the Plaza is in line with these considerations," he said.

Last week, Millennium said its recovery was "firmly on track" after turning half-year losses into profits of £20.6m.

The Surrey-based group, which suffered a sharp fall in profitability last year after Sars and the Iraq war hit the travel industry, said it was well positioned to make further good progress in the rest of its financial year.

It hailed the continued recovery of hotels in London, New York and Asia, although the move into the black was widely expected due to last year's weak comparatives.

M&C also announced that joint interim chief executive Mr Potter would become permanent chief executive by the end of the year.

The group operates 89 four- star and five-star hotels in 16 countries, including five London hotels and two at Gatwick airport.

It has 2,200 employees in the UK and 12,300 staff worldwide.

A Millennium spokesman said one of the reasons for the group's decision was that it does not wholly own the Plaza.

"They've decided it's something that would probably be of more value to someone else," the spokesman said.